Things To Know Before, During, and After Home Shopping.
By the time you are ready to look at homes, you are probably getting a lot of advice from many sources. It is a fortunate problem to have so many people wishing you good intentions. However, real estate changes daily and often what worked a few years ago may not be an option now or an option for your specific situation. Buying a home is likely the largest investment of your life and it is easy to get caught up in the emotions. The buying process can be a roller coaster. It does not have to be, and we believe education helps buyers reduce their buying anxieties.
Before The Viewings
When working with buyers, we want to reduce the likelihood of buyer’s remorse the best we can. Here are some things the research and experience have taught us, in no particular order. Let us know what you think!
- Meet with a real estate professional.
If you call an agent and they do not ask to schedule a time to discuss your unique situation before showing you houses, they may be desperate for your business. Do you want someone desperate for the commission to be representing you? They may worry more about their money than yours. Quality agents will ask you many questions about yourself before seeing the first house. The best agents will ask you to sign a representation agreement.
- Understand your agent’s role.
Per Florida law, real estate agents are considered transaction brokers. That means most customers are not fiduciarily represented by the agent and that agent cannot sign papers committing the buyer or seller to a contract. Agents in Tallahassee have been trained to have the buyer sign a buyer’s representation agreement. If your agent does not have you sign one, this may be a warning sign. These representation agreements lay out an agents’ duties and responsibilities to you. If you want the agent to keep something confidential – here is where you put it. If you want to see what is on there before you sign (AND we highly recommend that) email us and we will send you a copy. It is the same form used throughout the state (unless the brokerage is a big one and has their own attorney created form).
- Know your budget.
Before speaking to a lender, have a family conversation about your financial comfort zone. What is the most you would feel comfortable paying a month on a mortgage? Is there anything that would make you change that number? Are there things that would have to happen before that higher number feels more comfortable? Your lender can help you find a mortgage that will fit in your budget in most circumstances.
- Be pre-approved with a LOCAL lender.
The preapproval letter means that a lender has looked at your assets, your income and your debt and feels comfortable committing in writing that you would qualify for a home loan. With this preapproval letter will come a disclosure of your estimated monthly mortgage payment (including estimated taxes, homeowner’s insurance, and interest). If you are looking for homes with a homeowner’s association, that monthly number will increase to cover the dues owed yearly to the association. We want to stress using an experienced LOCAL lender. There are a few areas with quirks that can sneak up on the inexperienced lender or a lender ‘not from around here.’
- Know your numbers for a potential offer.
Most buyers are looking at a competitive market right now and may have to consider how they will make their offer stand out in the crowd. Check with your lender and your agent to have a plan before you enter the competition. We work with a lender that will provide the seller a $2500 guarantee that the loan will close on time (for qualified buyers).
- Consider writing a personal letter to the seller.
These letters have helped countless buyers win the offer in competitive bid situations. Especially if the buyer shares characteristics with the sellers or can otherwise make an emotional appeal. This has led to some agents no longer accepting personal letters to sellers due to the risks of violating (or appearing to violate) Fair Housing laws. If the personal letter reveals information that puts the buyer in a protected class and their bid is not accepted, some sellers fear having to protect themselves in court from accusations of bias for selecting another offer.
- Set your priorities in writing.
If you have been dreaming about coffee on the deck, space for the family meals, or maybe the solitude of a man cave. This is a great time to set down your five must-haves and five want-to-haves. It will help you sort out which home is going to meet your needs. It is easy to fall for a pretty face and make an offer on a home that looks gorgeous, but only had one of your priorities. Often that leads to buyer’s remorse, and we want to avoid that.
- Check the settings on your social media accounts.
More often than not, buyers and sellers are curious about each other and may do a google search to see what is out there. Make sure there is nothing posted that will compromise your negotiations. We had a seller that was asked to help cover the buyer’s closing costs and pointed to the buyer’s recent vacation photos posted from Greece as the reason he did not feel the need to help with buyer’s costs.
- Submit a backup offer.
Almost a third of negotiated offers fall through for one reason or another. If you like the house, make an offer even if it is already under contract. If accepted as a backup offer, the seller will not go back to market, but will instead be under contract with you. Your timeline starts upon notification from the seller that the previous offer terminated and your offer is now in play. You are still given time to complete inspections per the contract.
- Talk title and closing before the offer is in writing.
Many closings in Tallahassee are handled by title companies. Title insurance is the insurance policy banks require borrowers to purchase for them. Title insurance protects the policy holder from any claims against the property. Things like missed liens or bad legal descriptions. We recommend getting a title insurance policy to cover you, the owner of the home. If you only get the bank a policy, you are not covered at all, and the property is not covered at all after the mortgage is paid off. Even if you are paying cash, we recommend a policy to protect you. This title agent is usually the one closing the property. That means transferring ownership from the seller to you, the buyer. Figure out who you would like to work with before you make an offer. Also, we take pictures of photo identification and match the names on the contract with the photo identification. At closing your signature will be notarized, we have found it is much easier if all the names match on the documents. (Hint – loan documents should also match your photo identification for the same reason.) If you or a co-borrower travels a lot or might not be available to sign documents at closing, let your agent know. There are forms that can be signed to make sure you can close on time.
- Do not be pressured.
It is easy to get caught up in the competition and be more concerned about winning the bid than whether the home meets your needs. Do not feel pressured by your agent, the seller, or the sellers’ agent to make an offer that is outside of the comfort zone you set before you started looking at homes. On the other hand, if you sleep on it, in this market, there is a good chance you will not sleep in it.
What to Expect During the Home Viewings
When you have everything in order and you are visiting homes with the purpose of buying one - it is Game Time! It can be a lot of fun visiting neighborhoods and seeing how homes live in real life. Don't forget to take a bag of snacks, wear comfortable walking shoes, and dress comfortably in layers. Here are some rules to live by when choosing the home to make an offer on:
- Do not fall in love what you do not own - yet.
It can be tempting to fall in love with a home on the first date. Do not fall in love. Let us say you have written down your must-haves and your wants and then you find the house that ticks all the boxes. Do no fall in love with this house until you have the keys at closing.
- Use all five senses.
Often sellers will tell you who they are if you look close enough. Is the grout missing in the bathroom? Do they still have the Christmas lights up in April? Are there leaves lying on the roof? Does the sunroom smell like pet pee? None of these need to be deal breakers, but they can indicate neglected maintenance. While this can be an indicator that there will be hidden damage, there is truly little in real estate that can not be fixed and/or repaired.
- Keep a list of questions you will need answers to before contingencies end.
You should be encouraged by your real estate agent to obtain all the inspections you need to feel comfortable laying your head in this house every night for the next several years.
- Sellers and listing agents love feedback. Please provide it honestly.
Even if the feedback is not particularly pleasant, telling them the truth will help sellers and listing agents in the long run. Most buyers agents will fill these forms out based on what you mentioned during the tour. Sometimes buyers do not want to send the seller feedback since they are considering making an offer in the future.
- Choose a home that does not break the bank.
One way to avoid buyer’s remorse is to stick with your budget. It may be tempting to break the budget for that incredibly special house, but before you do think about what you will need to give up and see if it balances out for you. It seems to us, and research seems to back this up, those that stick to their budget are happier and have less buyer’s remorse.
Once you have found the home you want to make an offer on, the fun of negotiations begins!